You may have picked up that I like to talk about certain topics that fit into specific departments or areas of business.
There is plenty to talk about and even if some topics feel very yawn-ish, they’re important not to ignore if you want to run a successful business.
Working with many Visionaries over the years as their Operations Manager or Integrator has shown me that there are many things they want to be across in their business, or understand a better approach to managing these areas in a compact way.
I want to continue giving you insights into things I’ve learned, implemented, and developed over the years and share them with you.
Now, the next area of business is one we all love when it’s working and hate when it’s not.
I’m talking money $$$.
I won’t show you how to build one of those “6-figure businesses” or teach you how to do your bookkeeping because that’s really not my style. But I want to give you a couple of thoughts and things you can implement for your business to increase the net profit or bottom line of your business that also reflects in your cash in bank.
I promise it won’t be too dry – but knowing that most businesses struggle with cashflow this might be something to stick out!
Unless you’re a Finance nerd you might start losing interest.
But bare with me!
Cashflow is a struggle in many businesses, especially those that deliver services over a longer period of time that simply don’t charge right or at the right time.
That might be hard to hear, but trust me, you need to hear it.
Timing is crucial when delivering services and I can’t tell you how many times I have seen this same story before:
“We put so much effort into preparing this advice for this prospect and now they are not going ahead.”
“I wish I would have charged a deposit because now the client is pulling out and can’t pay us for what we’ve already done.”
“I sent all those invoices but people just take their time which is so frustrating because I need to pay for my team next week.”
If that doesn’t sound familiar, great!
But if it does… I want to talk about struggling with cashflow and the timing of getting paid.
If you offer services or products that require longer production time, charge a deposit or engagement fee, and then in equal monthly or weekly installments unless someone wants to pay upfront in full.
I know that “No one in our industry does this,” or “The prospect might not go ahead with our services,” but all I can say is:
You don’t always have to conform to what everyone else does.
If a prospect doesn’t want to start paying when they start getting your services, then you probably don’t want to work with them because it means they don’t value your work.
Here’s an example:
In the Financial Services industry, for many years advisers prepared hours and hours of advice documents before they saw a single dollar.
They presented the whole advice piece and then the potential client walked away with it without signing up as a client, and the adviser didn’t get paid because they charged out of investments after advice was implemented.
How’s that for wasted resources?
You can send as many invoices as you want, and even if you send them for weekly or monthly instalments… if they don’t get paid there’s just more time wasted sending and following up on outstanding invoices.
“Sorry, I forgot to pay it but will do it today, I promise!”
“I’m waiting for this one invoice to be paid and then I can transfer,”
“My team member who does payments isn’t in this week but I’ll let her know when she’s back,”
How many times have you heard these excuses before?
The reality is that these businesses are in the same situation you’re in and should set up direct debits!
If you want consistent cash flow and to get paid on time, set up direct debits.
There are plenty of platforms you can use and you can include the costs in your fees.
You should do your own research as to what works for your business but using direct debit for every client will decrease your receivables.
Even better if you set them all up on specific days of the month or week so you know exactly when cash is coming in and to enable you to plan ahead.
Now that you’re getting cash in the door regularly, you should look at tracking that hard-earned money and do some budgeting and forecasting.
Check some of my other blogs and videos on tracking and how to make better business decisions to grow your business to whatever “x-figure business” you plan it to grow.
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